vineetsaini19 Started The Discussion:
Hi All,

In our organization, employees have accumulated 40 -50 PL's.

Now they are asking for encashment. Our HR Policy is also not clear on this.


Hi Hi dear this is varied from organizatin to organization.You just check the previous Records of your organizaton and see how they managed to give. Regards SHYAM
First you have to frame HR policy for PL encashment, there is no statutory proceedure in leave encashment. Do as your management wish.
Dear Vineet,

You have not mentioned the name of the Act under which your unit is covered i.e Punjab Shops Act,1958 or The Factories Act,1948.Leaves provisions are there in both the enactments. It is made clear that there is no provision in the labour laws for encashment of leave during service period but these are encashed at the time of making of full & final payment to the employee. Maximum no of leaves which can be encashed is 30 under EL head. If the mgt. wishes then this limit can be increased.


Sr. Associate
Skylark Associates, Gurgaon (Haryana)
(Labour Law & Legal Consultants)
Thanks for the responses. If maximum 30 can be encashed. Please guide maximum how many can be accumulated.????/ Vineet
Dear An employee can accummulate 30 E L. Regards, R.N.Khola Sr. Associate Skylark Associates, Gurgaon (Haryana) (Labour Law & Legal Consultants) 09810405361

please go through this link. Nothing has been mentioned about the leave encashment. But u may find some related info:

The organisation should make a leave policy wherein all the leaves like sick leave, casual leave, privilege leave or earned leave are clearly defined... As far as EL is concerned.....
if an employee, has 50 EL balance.. then a policy should be made that at the end of every year 20 EL should be kept balanced and that to EL can be availed only thrice in a year. So and employee can avail EL encashment thrice and that to keeping 20 balance...for that year....
dear vineet, greatings of the day, as per the punjab shops and commercial establishment act 1956, accimulation of pl is upto 30, so u can encash the balance leave as per ur organisation’s rule
Dear Vineet,

Please find the below information on E.L.'s....



1. All permanent Staff.
2. EL is calculated for the days worked during the previous calendar year.


1. 1 El for every 20 working day (if 6 days per week);
2. EL will be credited to permanent staff only on completion of 1 yr of service with the Comp.
3. The days served under probation will be taken into account for EL eligibility.
4. EL can be availed only on prior approval.
5. Nation/Declared/Festival/Weekly off days can be prefixed and /or suffixed to EL.
6. Intervening National/Declared/Festival/Weekly Off days will NOT BE counted as part of the leave.
7. Half day of EL cannot be taken.
8.Balance EL remaining un-utilized as on 31st December can be carried forward.
9. EL can be accumulated for a maximum of 90 days.
10. Accumulated EL over and above 90 days can be encashed at the rate of last basic pay drawn on the 31st of march of during final settlement in case of resignation /retirement/termination.
11. At the time of resignation/retirement/termination the balance EL will be en cashed at the basic pay rate as on the day of resignation/retirement.
12. any absence of more than the number of EL sanctioned will be treated as leave without pay, unless given valid reasons to the management.

Jaya A.K.


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